 Hello and welcome to this analyst brief where we're discussing Dell's Apex Cloud platform and Apex Cloud platform for Microsoft Azure announcements. I'm Dave Vellante and Rob Strecci and I will unpack the market for cloud computing and what the Dell Microsoft announcement means to customers. First, let's take a look at cloud usage and the movement between public and private cloud which continues, but looking at the data we're seeing the market is becoming much more balanced. This chart from ETR shows the percent of usage of public clouds relative to private clouds specifically within the S&P 500. Now that portion of the market represents a very large sector of spending, well over half of IT spent. As generally considered a bellwether, the data shows that about 43% usage of public cloud today in this sector grow into 55% by January, 2026. Now note that that 2026 figure is down from just 10 months ago, implying that the market is reaching a more balanced state, i.e. many workloads are where they belong and the steep momentum to migrate off-prem has stabilized. Rob, what do you make of this data? Yeah, I think it really makes a lot of sense and is really not even, would have been counterintuitive 10 months ago, but I think what we see today is that cloud is an operating model, it's not a place. And I think that companies and organizations that we talk to are really taking a hard look at where they place their applications going forward, not just going cloud first or cloud only, they've backed way off of that strategy and it's cloud went right and they're looking at Colo and a lot of on-prem again is becoming more in vogue for those cloud native apps. And they can get that agility on-prem that they're so used to in the cloud. Maybe if you need like massive scale and unlimited resources, then you maybe put those in the cloud, but it really is much more of a balanced picture. Absolutely. All right, let's take a look at another set of data. This time we isolated in the global 2000, which is another bellwether. By 2026, as you can see in that dotted red area, only 11% of global 2000 customers expect to be all in in the public cloud. So nearly 90% of global 2000 customers think they're going to remain hybrid by the 2026 timeframe. Now, Rob and I recently talked to Shannon Champion, Odell, and discussed the Apex Cloud Platform family. Then you, Rob, spoke with Caitlin Gordon of Dell and Dean Perron of Microsoft about the Apex Cloud Platform from Microsoft Azure. Now, Dell recently announced the Apex Cloud Platform and Apex Cloud Platform from Microsoft Azure. So Rob, what are the relevant customer requirements that people need to know in this space? I think like we've been hearing from organizations, companies are not all in on cloud anymore. There isn't that cloud first. It's, again, we're going to be balanced in where we develop especially. And a lot of that's being developed. All of these cloud native apps are being developed on premise. I think what they're looking at it is that they're not necessarily repatriating from cloud, but they're taking a balanced look at where they deploy, how they deploy. And it's more about can I get the development environment that I really wanted? So if they're, for instance, using Azure, they're looking for the Azure tooling that they're so used to when using Azure. The requirements are, again, how do I have that cloud native experience and cloud native build? So they want to be able to have those requirements of getting up to speed really quickly. So how fast can my developers really start developing? Instantly has to be there. So you have to have that native environment to keep the devs happy. Applications are going to be places that cloud native really hasn't been before. We're talking about edge. We're talking about smaller footprints. So it makes sense to be actually developing for those apps in those places or off the cloud. And then there's also a huge part of the puzzle is there's a lack of skills in how you run cloud native. So they're looking for automation and a lot of management and that day two type of operations to help them. And often it's also lack of skills and security. So they're looking for security to be built in from the start. And that's really the key requirements that they're looking at. So we saw from the previous data that the world is kind of reaching this state of equilibrium. It's clearly a hybrid world. How does this announcement address these changing customer requirements? Yeah, I think what Dell and Microsoft and Dell in general with the Apex announcements they've made, they also made an announcement around Apex stores for public cloud. They're bringing consistency of cloud experience across on-premise and across cloud deployed storage requirements and that brings mobility and it helps them with multicloud deployments where you're using the same kit in both places. Second, Apex cloud platform family really helps with that consistency and especially when you look at Microsoft Apex cloud for Microsoft Azure you're getting consistency if you're using those Azure tooling. It helps you and given that Azure is one of the fastest growing hyperscalers that you've talked about before, I think that operating model and having that Azure operating model on-premise is really helping them. And we're also seeing it in Colo as well. Third, Microsoft has created the solution or their part of this is by bringing certifications and new tiers of certifications. This helps customers understand that these products are really in line with that Azure experience. And in fact, the Dell Apex provided solution is a Microsoft Premier solution for Azure Stack HCI and it's the first one out there. So they have the confidence, those customers have the confidence that this is all gonna work together. And I think that's the important because it gets that skill set, the security and keeps that momentum going. You know, the early instantiations, Rob, of Azure Stack had this vision, but it didn't quite have that sort of common experience that we're now seeing. Let's get into the announcements. What specifically did Dell and Microsoft announce and why should customers be interested? Yeah, I think, you know, when I broke this apart and took a look at it, I looked at it and said, okay, what's different? And it's not really a rehashed HCI announcement. It's not your typical HCI. It really is about the operating model. And HCI for the audience is hyper-converged infrastructure. Yes, yes. Software-led infrastructure. Right, and you know, and Dell's been a leader in that market for quite some time now. I think when you start to see what they've learned over the years, along with what they've been partnered very deeply with Microsoft and brought to the cloud platform, the Apex Cloud Platform, is really taking advantage of those Azure frameworks. So they're being able to integrate with Azure Arc, for instance, and that Arc experience or Azure Arc, which is a management system developed by Microsoft, it's heavily integrated with Dell's management stack. So you get a consistency of getting up and running really quickly, you know, within four hours and underneath that in some instances, instantly for bringing up new applications, that really helps. And that Arc service also ties into other Azure services, such as AKS, which is Azure Kubernetes service. And it ties in with Azure and Dell data services so you can get virtual machines or containers in the Kubernetes service up and running really quickly. And beyond that, and what's, you know, beyond the typical, it's not the same platform underneath. No matter what you're looking at, they bring a consistency of platform, Dell does to all of their families. So as they roll out more, and this is the first one, you'll start to see that they have, for instance, their software defined storage layer underneath all of the platforms to give consistency of operations as well. So it starts to blur the lines between the public and private. And this is, we've been looking forward to this day, Rob, for a long time, haven't we? Oh yeah, absolutely. And I think also it helps when the companies are really, I would say well aligned with each other. And to the point where it's a powerful partnership where Dell, APEX, platform users are able to get within four hours actual Microsoft code that has been released. So if Microsoft, you know, on their, you know, patch days goes out and releases security patches, within four hours, you're gonna get those patches within that APEX platform. This is key to being able to be security aware and frontline with security. That's critical because it used to be, you know, patch Tuesday was just an alert to the hackers to go, you know, hacking on Wednesday. And now they're, it's zero day, Tuesday. So the faster that you can compress that time, the shorter you can compress that time, the safer people will be. Rob, thanks so much for unpacking these analysis with me, really appreciate it. Thank you. All right, and thank you for watching this Analyst Brief. This is Dave Vellante and we'll see you next time.